The New York Times has reported that Former President Donald J. Trump was ordered to turn over materials sought by Letitia James, the New York attorney general, and will be fined $10,000 per day until he does so.
On Monday judge, Arthur F. Engoron held Donald J. Trump in contempt of court for failing to turn over documents to the state’s attorney general, which was previously anticipated but is nevertheless an extraordinary turn of events.
Trump will be assessed a fine of $10,000 per day until he turns over the documents. The ruling essentially implies that the judge concluded that Mr. Trump had failed to cooperate with the attorney general, Letitia James, and did not follow the court’s orders.
As quoted by the Times: “Mr. Trump: I know you take your business seriously, and I take mine seriously,” remarked Justice Engoron of State Supreme Court in Manhattan, before he held Mr. Trump in contempt and banged his gavel.
Alina Habba, a lawyer for Mr. Trump, said she intended to appeal the judge’s ruling.
Although Trump’s legal team plans to appeal the ruling the news is still significant and represents a history for the New York attorney general.
Takeovers are usually friendly affairs. Corporate executives engage in top-secret talks, with one company or group of investors making a bid for another business. After some negotiating, the companies engaged in the merger or acquisition announce a deal has been struck.
But other takeovers are more hostile in nature. Not every company wants to be taken over. This is the case with Elon Musk’s US$43 billion bid to buy Twitter.
Companies have various measures in their arsenal to ward off such unwanted advances. One of the most effective anti-takeover measures is the shareholder rights plan, also more aptly known as a “poison pill.” It is designed to block an investor from accumulating a majority stake in a company.
There are many variants of poison pills, but they generally increase the number of shares, which then dilutes the bidder’s stake and causes them a significant financial loss.
Let’s say a company has 1,000 shares outstanding valued at $10 each, which means the company has a market value of $10,000. An activist investor purchases 100 shares at the cost of $1,000 and accumulates a significant 10% stake in the company. But if the company has a poison pill that is triggered once any hostile bidder owns 10% of its stock, all other shareholders would suddenly have the opportunity to buy additional shares at a discounted price – say, half the market price. This has the effect of quickly diluting the activist investor’s original stake and also making it worth a lot less than it was before.
Twitter adopted a similar measure. If any shareholder accumulates a 15% stake in the company in a purchase not approved by the board of directors, other shareholders would get the right to buy additional shares at a discount, diluting the 9.2% stake Musk recently purchased.
Poison pills are useful in part because they can be adopted quickly, but they usually have expiration dates. The poison pill adopted by Twitter, for example, expires in one year.
No one has ever triggered – or swallowed – a poison pill that was designed to fend off an unsolicited takeover offer, showing how effective such measures are at fending off takeover attempts.
These types of anti-takeover measures are generally frowned upon as a poor corporate governance practice that can hurt a company’s value and performance. They can be seen as impediments to the ability of shareholders and outsiders to monitor management, and more about protecting the board and management than attracting more generous offers from potential buyers.
A poison pill isn’t foolproof, however. A bidder facing a poison pill could try to argue that the board is not acting in the best interests of shareholders and appeal directly to them through either a tender offer – buying shares directly from other shareholders at a premium in a public bid – or a proxy contest, which involves convincing enough fellow shareholders to join a vote to oust some or all of the existing board.
In another weekend explosion, this time, revealing the hands on bent of ideas for TWX project
Once again the weekend is seeing a barrage of tweets from Elon Musk, this time with a solid bulls-eye on Twitter itself and changes he has on his wishlist. Implementation schedule appears to be, well, immediate.
The first tweet we are featuring was a preview of just how much of an activist shareholder he is planning to be.
Looking forward to the first board meeting he will attend since his $2.9 billion 9.2% stake in the bird platform – Musk reposted a meme of his infamous “Ganja weed” interview – essentially creating an instant meme of memes:
**note – on Sunday night (April 10th, 2022) it was revealed that Elon Musk joining the board would not be a thing, after all. Most likely reason sited in the avalanche of reactions? A board seat would have capped the maximum investment / stake percentage at 14.9% and brought potentail legal issues. As the largest shareholder the door remains open to his acquiring the company outright, and continuing the activist direction clearly indicated in the tweets below…
Next, the constructive criticism started, first taking note (perhaps already up his sleeve as he contemplated shelling out 3 bil of pocket change) of how many of the accounts with the most followers post “very little content”. Summing up his thoughts with the question “Is Twitter dying?”
Most of these “top” accounts tweet rarely and post very little content.
Next, in replies to himself he got granular, citing two very specific examples, how @taylorswift13 and @justinbieber are remiss when it comes to staying active and tweeting on a regular basis…
Apparently, the day was just beginning to get interesting, cause he posted a Yogi Berra-like conundrum next, pointing out that statistics, including this very one, presumably, are very often false. Posted at 1:14 PM he may have had a siesta and found himself ready to rumble cause with the next tweet at 5:03 PM things started to cook…
He dug into his infographic trove of insights and pulled out this re-tweeted gem, showing how the Weather Channel is distrusted by nearly 50% of Republicans and about 35% percent of Democrats.
This tweet is an interesting one as there has been a lot of hand wringing and dire predictions made in the “media” that Elon Musk, known as having a Libertarian prediliction, will somehow be Trump’s savior and that his idea of “free speech” is similar to those that are somewhere to the Right of Q-anon.
This, I would venture, is highly unlikely. It’s far more likely that his idea of free speech might actually be closer to, well what it sounds like, less censorship. Oddly both the left and the right are anticipating disappointment, and perhaps, that is one of those be-careful-what-you-wish-for things.
The tweets of April 9th, seem to bear out the idea that he will be active, vocal and, above all, amusing, but unlikely to follow any faction or party.
Next came more specific and sort of practical tweets, like this one suggesting twitter “sell” the authentication checkmark as part of the Twitter Blue $3 subscription package. This, bizarrely, is a great business concept, and might actually happen, crazy as it sounds.
After reflecting briefly on the idea, it became clear that the invention of a new plebian version of the coveted mark is needed, lest it be confused with the rare and hard to acquire “public figure” or “official” accounts.
A quick followup tweet with self replies included the observation that the edit tweet feature that has had much action this week is already a done deal in the future paid Twitter landscape.
Then, as if out of the blue like a bolt of lightening Elon decides that there should be no ads! Ok, so this does make sense in a genius billionaire kind-of-way here’s the new breakdown:
Everybody pays $3 per moth
Advertising is cancelled
We all get checkmarks and an edit tweet feature
Corporations stop “dictating policy”
Twitter SF HQ is converted into a homeless shelter (unhoused refuge)
Then, in a semi-final, inspired burst of sunshine, there’s a great suggestion – actually a tweet from earlier in the am – 7:39 to be exact but pinned for now, the man who must be heeded points out that “crypto scam accounts” represent a large percentage that should be subtracted from the real accounts. ow if they can just remove the 3 billion fake accounts across all social media…
Apparently not able to quit while ahead, or maybe under the influence of jet lag or substances, this gem dropped:
As desirable vacation destinations go, war-torn Ukraine must surely rate low. But in the first month of Russia’s invasion, Airbnb bookings in Ukraine boomed, as people around the world used the accommodation platform to channel more than US$15 million in donations to the country.
As with other forms of direct donation, using Airbnb to channel aid to Ukraine has been problematic. The company was relatively quick to waive the 20% commission it usually charges on transactions. But stopping scammers from setting up fake accounts to collect money from well-meaning donors has proven more difficult.
It’s a story that illustrates both the potential and limitations of the so-called sharing economy.
Idealistic visionaries once imagined the internet would connect individual buyers and sellers, peer to peer (or P2P), without the need for intermediaries and their commissions. But this promise of market democratisation and inclusivity has largely failed to materialise.
Instead, the platforms that have arisen – eBay, Uber, Airbnb and so forth – are very much like traditional capitalist enterprises, putting the squeeze on rivals, exploiting labour, and making their founders and executives among the wealthiest people on the planet.
Platform capitalism
The founders of these companies didn’t necessarily begin with such ambitions. Airbnb’s founders, for example, started their website in 2007 to provide an alternative to mainstream hotels and motels, enabling anyone to offer a spare room or residence for short-term stays in the expensive San Francisco market.
Now Airbnb’s market capitalisation rivals that of the world’s biggest hotel chain, Marriott. In 2021, Airbnb reported US$1.6 billion in earnings before interest, tax, depreciation and amortisation, compared with Marriott’s US$2 billion.
Co-founder and chief executive Brian Chesky’s personal fortune is an estimated US$14 billion, placing him 157th on Forbes’ world billionaires list.
The fortunes made by the dominant sharing platform have not all come from technological innovation.
There’s little that is democratic about these platforms. The owners have the last say in the equation, dictating which actions and exchanges are allowed or cancelled.
Creating a true sharing economy
Our research on the sharing economy shows that digital platforms can be a powerful tool for individuals to collaborate in developing solutions to their needs. But for the promise of the sharing economy to be realised, platforms must be far more open, democratic and publicly accountable than they are now.
As the non-profit P2P foundation argues, peer-to-peer networks create the potential to transition to a commons-oriented economy, focused on creating value for the world, not enriching shareholders.
For that to happen, all users must have input into decisions about why a platform exists and how it is used.
Examples of what is possible already exist. Perhaps the best known is Wikipedia – a hugely valuable service that runs on volunteer labour and donations. It’s not perfect but it’s hard to imagine it working as a for-profit enterprise.
There are many attempts to create collectively owned, more democratic sharing platforms. In New York, for example, drivers have organised to create ride-sharing alternatives to Uber and Lyft based on cooperative principles. Such endeavours are known as platform cooperativism.
But these ventures routinely struggle to raise the money needed to develop their platforms. Members also vary largely in their knowledge of business practices, particularly the skills needed to manage democratic decision making.
To help these platforms thrive, we need public policies that assist them to raise funds. We also need programs that deliver financial and business education to platform members.
Beyond these practical difficulties, users also need to have a stake in how these platforms run for them be a fully transformative version of the sharing economy.
We’ve drifted a long way from the early hopes for the sharing economy. But it’s not too late to change course and work to co-create more equitable, human-focused models of exchange.
Several sites, such as one near Freeport, Texas, store the hundreds of million of barrels in the United States’ Strategic Petroleum Reserve. Department of Energy via AP
The Biden administration on March 31, 2022, said it plans to release an unprecedented 180 million barrels of oil from the U.S. Strategic Petroleum Reserve to combat the recent spike in gas and diesel prices. About a million barrels of oil will be released every day for up to six months.
As an energy researcher, I believe considering the reserve’s history can help answer these questions.
Origins of the reserve
Congress created the Strategic Petroleum Reserve as part of the Energy Policy and Conservation Act of 1975 in response to a global oil crisis.
Arab oil-exporting states led by Saudi Arabia had cut supply to the world market because of Western support for Israel in the 1973 Yom Kippur War. Oil prices quadrupled, resulting in major economic damage to the U.S. and other countries. This also shook the average American, who had grown used to cheap oil.
The oil crisis caused the U.S., Japan and 15 other advanced countries to form the International Energy Agency in 1974 to recommend policies that would forestall such events in the future. One of the agency’s key ideas was to create emergency petroleum reserves that could be drawn on in case of a severe supply disruption.
The map shows the locations of the oil held in the Strategic Petroleum Reserve. Department of Energy
The Energy Policy and Conservation Act originally stipulated the reserve should hold up to 1 billion barrels of crude and refined petroleum products. Though it has never reached that size, the U.S. reserve is the largest in the world, with a maximum volume of 714 million barrels. The cap was previously set at 727 million barrels.
Oil in the reserve is stored underground in a series of large underground salt domes in four locations along the Gulf Coast of Texas and Louisiana, and is linked to major supply pipelines in the region.
Salt domes, formed when a mass of salt is forced upward, are a good choice for storage since salt is impermeable and has low solubility in crude oil. Most of the storage sites were acquired by the federal government in 1977 and became fully operational in the 1980s.
History of drawdowns
In the 1975 act, Congress specified that the reserve was intended to prevent “severe supply interruptions” – that is, actual oil shortages.
Over time, as the oil market has changed, Congress expanded the list of reasons for which the Strategic Petroleum Reserve could be tapped, such as domestic supply interruptions due to extreme weather.
The third was a coordinated release by the International Energy Agency in 2011 as a result of supply disruptions from several oil-producing countries, including Libya, then facing civil unrest during the Arab Spring. In all, the agency coordinated a release of 60 million barrels of crude, half of which came from the U.S.
President Joe Biden’s November decision to tap the reserve was also seen as political by Republicans because there was no emergency shortage of supply at that time.
Similarly, the latest historic release of 180 million barrels could also be seen as serving a political purpose – in an election year, no less. But I believe it also seems perfectly legitimate in terms of fulfilling the Strategic Petroleum Reserve’s original purpose: reducing the negative impacts of a major oil price shock.
The Federal Reserve has begun its most challenging inflation-fighting campaign in four decades. And a lot is at stake for consumers, companies and the U.S. economy.
The challenge for the Fed is to do this without sending the economy into recession. Some economists and observers are already raising the specter of stagflation, which means high inflation coupled with a stagnating economy.
As an expert on financial markets, I believe there’s good news and bad when it comes to the Fed’s upcoming battle against inflation. Let’s start with the bad.
In all, Congress spent US$4.6 trillion trying to counter the economic effects of COVID-19 and the lockdowns. While that may have been necessary to support struggling businesses and people, it unleashed an unprecedented bump in the U.S. money supply.
At the same time, supply chains have been in disarray since early in the pandemic. Lockdowns and layoffs led to closures of factories, warehouses and shipping ports, and shortages of key components like microchips have made it harder to finish a wide range of goods, from cars to fridges. These factors have contributed to a worldwide shortage of goods and services.
Any economist will tell you that when demand exceeds supply, prices will rise too. And to make matters worse, businesses around the world have been struggling to hire more workers, which has further exacerbated supply chain problems. The labor shortage also worsens inflation because workers are able to demand higher wages, which is typically paid for with higher prices on the goods they make and the services they provide.
And now Russia’s war in Ukraine is compounding the problems. This is mostly because of the conflict’s impact on the supply of gas and oil, but also because of the sanctions placed on Russia’s economy and the ancillary effects that will ripple throughout the global economy.
The latest inflation data, released on March 10, 2022, is for the month of February and therefore doesn’t account for the impact of Russia’s invasion of Ukraine, which sent U.S. gas prices soaring. The prices of other commodities, such as wheat, also spiked. Russia and Ukraine produce a quarter of the world’s wheat supply.
Inflation won’t be slowing anytime soon
And so the Fed has little choice but to raise interest rates – one of its few tools available to curb inflation.
But now it’s in a very tough situation. After arguably coming late to the inflation-fighting party, the Fed is now tasked with a job that seems to get harder by the day. That’s because the main drivers of today’s inflation – the war in Ukraine, the global shortage of goods and workers – are outside of its control.
So even dramatic rate hikes over the coming months, perhaps increasing rates from about zero now to 1%, will be unlikely to make an appreciable impact on inflation. This will remain true at least until supply chains begin to return to normal, which is still a ways off.
Cars and condos
There are a few areas of the U.S. economy where the Fed could have more of an impact on inflation – eventually.
For example, demand for goods that are typically purchased with a loan, such as a house or car, is more closely tied to interest rates. The Fed’s policy of ultra-low interest rates is one key factor that has driven inflation in those sectors in recent months. As such, an increase in borrowing costs through higher interest rates should prompt a drop in demand, thus reducing inflation.
But changing consumer behavior can take time, and it’ll require more than a quarter-point increase in rates at the Fed. So consumers should expect prices to continue to climb at an above-normal pace for some time.
Higher interest rates also tend to reduce stock prices, as other investments like bonds may become more attractive to investors. This in turn may lead people invested in stock markets to reduce their spending because they feel less wealthy, which may help reduce overall demand and inflation. The effect is minimal, however, and would take time before you see the impact in prices.
That’s why I think it’s unlikely the U.S. will experience stagflation – as it did in the 1970s and early 1980s. A very aggressive increase in interest rates could possibly induce a recession, and lead to stagflation, but by sapping economic activity it could also bring down inflation. At the moment, a recession seems unlikely.
In my view, what the Fed is beginning to do now is less taking a big bite out of inflation and more about signaling its intent to begin the inflation battle for real. So don’t expect overall prices to come down for quite a while.
Bitcoin and Crypto’s reached a major turning point: why is cryptocurrency worth anything?
In a recent interview clip Jack Dorsey quietly states his opinion on the difference between people who “get” blockchain and crypto, and those that will forever be married to the past:
This is the simply stated portion that says it all:
“People who have questions in the world, people who have curiosity (and are) recognizing that the current systems, wether they be corporate financial systems or the government financial systems just aren’t working for them…”
Although the context of his statement is regarding bitcoin as the native currency for the internet, and in particular how people are responding to the fact that financial systems “just aren’t working for them” it is, nevertheless, a perfect statement of how the world is changing.
It has already changed into two distinct groups: those that are clinging to the status quo, since it has worked very well for them, and those that want to find a new and better way, because, in most cases, the current system did not work for them.
It’s important to realize that this statement is not coming from a disgruntled outsider, but from the hugely successful founder of Square, now called Block.
The fact that a large group of highly successful business leaders, such as Jack Dorsey and Elon Musk, although benefiting massively from the current financial systems, are at the same time embracing a new way of thought and action for the future, is at the crux of the issues addressed in this post.
Buffet vs Musk & Dorsey and the zero sum mindset of Malthusian Capitalism
There is a war waging between those that are open to, and welcoming of, bitcoin, crypto, blockchain, DeFi and other new financial innovations and those that reject all of it and would like nothing more than to see it stopped, by any means necessary.
The derision, insults and disdain lobbed at bitcoin, crypto and anyone that believes in them, by the “old guard” epitomized by Warren Buffet and Charlie Munger are now well known and documented:
A few quotes:
“Probably rat poison squared.” — Warren Buffett in Fox Business interview at 2018 meeting
“I think I should say modestly that the whole damn development is disgusting and contrary to the interests of civilization” – Charlie Munger vice chairman at Berkshire Hathaway
“I certainly didn’t invest in crypto. I’m proud of the fact I’ve avoided it. It’s like a venereal disease or something. I just regard it as beneath contempt.” – Charlie Munger vice chairman at Berkshire Hathaway
Interestingly, if you look deeper at the interviews and quotes, you’d see that, in spite of the headline grabbing hyperbole, it’s the price speculation that is at the heart of the criticism.
The comments that crypto and bitcoin “don’t produce anything” are ridiculous on their face, as if the fiat dollar “produces” products, services or anything else.
Oh, wait, the dollar does “produce” inflation (loss in value), and has done so very dependably over the last 100+ years.
Take a stat so well known that it is almost a cliché, any way you put it: a 2013 U.S. dollar (the year the federal reserve was created, not coincidentally) would be worth more than 16x what a dollar is worth today. One has to ask where that value is now?
Bitcoin, however, has over time only gained value. A lot. If bitcoin is rat poison, maybe the fiat system and the federal reverse are the rat?
100 year old billionaires are, aparently, not inclined to speak from enlightened self-interest. Or, to be kind, perhaps they are blinded by the success they enjoyed in a system that favors anyone at the top of the pyramid, one built on value theft?
One very big caveat, however, is clearly that the “everything bubble” is bursting, price speculation always ends in price crashes, and the massive gains in the value of various cryptocurrencies are a symptom of a larger systemic emergency, rather than a quality inherent to crypto itself. There’s that.
The gap between this kind of thinking vs. that of the forward looking cryptocurrency proponents, and what they consider to be positive innovations, is vast. In a time where divisive thought is nearly ubiquitous this is not news.
However, the fact that the legions of those that “get it” are as large as they are, and that they are constantly growing, has clearly taken the debate past the point of no return.
To get the full view of this divide it’s important to look also at just how the nearly 100 year old duo of Buffet & Munger got to be the “legends” that they are.
All the best known names they are associated with, from the initial Berkshire Hathaway purchase in 1962 to more recent investments in companies such as CocaCola, GEICO Insurance, RJ Reynolds Tobacco, Sees Candy, Clayton Homes and so on, paint a clear picture of extreme hierarchal and exploitative capitalism that is solely based on making themselves and shareholders rich, and doing it on the backs of consumers.
In an example of the thinking of those that do not worship the duo, in The Nation, David Dayen wrote: “America isn’t supposed to allow moats, much less reward them. Our economic system, we claim, is founded on free and fair competition. We have laws over a century old designed to break up concentrated industries, encouraging innovation and risk-taking. In other words, Buffett’s investment strategy should not legally be available, to him or anyone else.”
Exactly this kind of double standard, corrupt to the core, is built on systemic greed founded on a Malthusian “zero-sum mindset”. This is what has led millions to conclude that the system just isn’t working for them.
Being championed ad nausea for this lifetime of “achievement” is part and parcel of the status quo that many, from many in the 99% to the “nouveau 1%”, such as Elon Musk, Jack Dorsey, Vitalik Buterin and many others, are actively seeking alternatives to.
That distinction, being rich and powerful and yet not satisfied with the legacy of corruption and greed, is at the heart of the new wave of thought that has made bitcoin, crypto and DeFi a force to be reckoned with.
Moreover, seeing the state of the world that centuries of this kind of thinking has engendered, it’s natural for the young and more enlightened to want to search for other ways for things to work, ways that perhaps champion something other than monopolistic greed and exploitation.
In a recent Interview Elon Musk addressed precisely this issue – how many in the current system are focused on prospering at the expense of others and maintaining a zero-sum mindset. In the clip he outlines how important it is to understand the failure of that approach.
The idea that crypto will disappear is wishful thinking by those that cling to the systems of the past
A clip of Harrison Ford speaking at the Global Climate Action Summit was banned on some platforms as incendiary. Why? Because he passionately accuses those that are financially linked to fossil fuels of working to spread disinformation and misinformation, in order to perpetuate their massive incomes, even while the planet is on the brink of climate disaster.
Blocking this opinion, from a rich and famous film star, no less, is typical in the way that the established system works to suppress the idea that you should do anything about the fact that “it’s just not working” for you.
This is the same divide, mentioned above, that is nearly all pervasive today, but will never stop innovation in thinking about financial systems. It will not stop DeFi or DAOs or crypto or bitcoin.
It will not stop sustainable energy from becoming an ever bigger part of the world’s energy infrastructure. The point of going back has long since passed.
How money works according to Musk
Jack Dorsey has an understated and somehow “quiet” way of expressing revolutionary ideas. Elon Musk, on the other hand, is well known for controversial and flamboyant statements, and especially tweets.
But to get a taste of just how radical his thinking really is, particularly to those that disagree, you have to dig deeper into lengthy interviews, such as those with Lex Fridman, where he reveals his thinking more specifically on money, crypto and the governments role in the system of money.
Coming from the wealthiest person on earth, some may find it odd, yet his thoughts on crypto vs fiat money are well documented. It’s just this kind of stance, taken by so many in the “new” establishment at the top of the current financial pyramid, who also see the necessity for change toward new ideas and systems that can so away with the worst of the status quo, well represented above by Buffet & Munger and other “crypto haters”.
Government is a corporation in the limit
In yet another interview excerpt, Musk goes even deeper into his belief that – in his exact words: “if you don’t like corporations should really hate governments”
While this particular statement arose out of a spat with Senator Elizabeth Warren regarding taxes, the overall concept of challenging the status quo and the, clearly failed, systems perpetuated, remains in play.
Web3, and how Web2 and legacy financial structures are linked
Although fraught with infighting – the typical bitcoin vs. Ethereum vs. Doge vs. Shiba Inu internal debates and criticisms are not on the magnitude of the division between those that generally support and benefit from, for example, status quo financial structure and fossil fuel business, vs those that favor Blockchain and Sustainable energy.
Further, the spirit of the clash between Web2 and Web3 rests not on the tech or the systems themselves, which it can be argued are the same, but on the beliefs and intent of each camp.
The surveillance capitalism business models of web2, epitomized by Facebook and Google are diametrically opposed to the spirit and stated goals of web3, just as bitcoin was created out of a time that, not coincidentally, corresponded to the 2008 crash and crisis born of the greed and corruption of the legacy economic establishment.
There are two distinct camps that have emerged.
Those, such as Tesla and Elon Musk, that reject the traditional holy grail of shareholder value and instead embrace, for example, a more enlightened mission “to accelerate the transition to sustainable energy”. This aligns with any individual choosing the support crypto as a “Hodler” or at least believer, vs. those that support the legacy systems of finance, the fossil fuel industrial complex and Web2’s exploitative business model.
This divide is the ultimate test of our time and it will only grow in stature and importance.
The correspondence between forward looking innovation in all human thought, communication and action is already too big to stop and cannot be wished away.
There will undoubtedly be setbacks to these new directions, and there will be attacks using more than insults, such as those quoted above, but the time for the unstoppable force to be quelled is long since past. Coke and a smile? No thanks.
These sanctions are aimed at generating opposition from both Russian President Vladimir Putin’s inner circle and everyday Russians. As a scholar who studies regime change, I believe the risk is that they will actually drive the Kremlin’s weak opposition further into obscurity.
A ‘punishment logic’
Economic sanctions follow a “punishment logic”: Those feeling economic pain are expected to rise up against their political leaders and demand a change in policies.
In authoritarian regimes like Putin’s, where average citizens are the most likely to suffer, sanctions usually do more to hurt the opposition than help it.
How Putin has quelled dissent
Putin has used a variety of tools to try to quell domestic opposition over the past two decades.
Some of these were subtle, such as tweaking the electoral system in ways that benefit his party. Others were less so, including instituting constitutional changes that allow him to serve as president for years to come.
Despite a clampdown on activism, Russians have repeatedly proved willing to take to the streets to make their voices heard. Thousands demonstrated in the summer and fall of 2020 to support a governor in the Far East who had beaten Putin’s pick for the position only to be arrested, ostensibly for a murder a decade and a half earlier. Thousands more came out last spring to protest against Navalny’s detention.
Putin has even begun facing challenges from traditionally subservient political parties, such as the Communist Party and the nationalist Liberal Democratic Party.
Flickers of opposition
Importantly, Putin has occasionally shown a willingness to back down and change his policies under pressure. In other words, as much as Putin has limited democracy in Russia, opposition has continued to bubble up.
The result is a president who feels compelled to win over at least a portion of his domestic audience. This was clear in the impassioned address Putin made to the nation setting the stage for war. The fiery hourlong speech falsely accused Ukrainians of genocide against ethnic Russians in eastern Ukraine. “How long can this tragedy continue? How much longer can we put up with this?” Putin asked his nation.
Since Russia invaded Ukraine, Russians have continued to show their willingness to stand up to Putin. Thousands have gathered to protest the war in Ukraine, despite risking large fines and jail time.
Despite these public showings, the liberal opposition to Putin is undoubtedly weak. In part, this is because Putin controls state television, which nearly two-thirds of Russians watch for their daily news. Going into this war, half of Russians blamed the U.S. and NATO for the increase in tensions, with only 4% holding Russia responsible.
Putin has already shown he can use his information machine to convert past Western sanctions into advantage. After the West sanctioned Russia for its 2014 takeover of Crimea, Putin deflected blame for Russians’ economic pain from himself to foreign powers. The result may have fallen short of the classic “rally around the flag” phenomenon, but on balance Putin gained politically from his first grab on Ukraine. More forceful economic sanctions this time around may unleash a broader wave of nationalism.
And former Russian president Dmitry Medvedev reacted to the country’s expulsion from the Council of Europe by suggesting Russia might go back on its human rights promises.
Another casualty of the war
This has already begun.
In the first week of the war, Russian authorities arrested more than 7,000 protesters. They ramped up censorship and closed down a longtime icon of liberal media, the Ekho Moskvy radio station. The editor of Russia’s last independent TV station, TV Dozhd, also announced he was fleeing the country.
Russia already ranked near the bottom – 150 out of 180 – in the latest Reporters Without Borders assessment of media freedom. And a new law, passed on March 4, 2022, punishes the spread of “false information” about Russia’s armed forces with up to 15 years in jail.
Ultimately, the opposition seen on the streets in Russia today and perhaps in the coming weeks may be the greatest show of strength that can be expected in the near future.
Even in the best of circumstances, economic sanctions can take years to have their desired effect. For Ukrainians, fighting a brutal and one-sided war, the sanctions are unlikely to help beyond bolstering morale.
The danger is that these sanctions may also make average Russians another casualty in Putin’s war.
Above: Photo Collage – Rolling Stone / Lynxotic / Various
The U.S. senator from Vermont called for “serious sanctions on Putin and his oligarchs” in response to the Kremlin’s latest moves.
Sen. Bernie Sanders on Tuesday called for the U.S. and its allies to impose heavy sanctions on Russian President Vladimir Putin and other oligarchs in the country as he condemned Moscow’s escalating military aggression toward Ukraine.
“Vladimir Putin’s latest invasion of Ukraine The U.S. senator from Vermont called for “serious sanctions on Putin and his oligarchs” in response to the Kremlin’s latest moves.is an indefensible violation of international law, regardless of whatever false pretext he offers,” Sanders (I-Vt.) said in a statement. “There has always been a diplomatic solution to this situation. Tragically, Putin appears intent on rejecting it.”
In addition to backing sanctions, Sanders said preparations must be made to accommodate refugees displaced by the conflict and called for investments in a global clean energy transition to fight the climate crisis and disempower “authoritarian petrostates” worldwide.
Sanders’ remarks came after U.S. President Joe Biden—in concert with officials in the United Kingdom and the European Union—moved to impose new economic sanctions on Russia following the Kremlin’s deployment of troops into two breakaway territories in eastern Ukraine, which Putin on Monday formally recognized as independent.
To prevent Putin’s effort to expand his country’s presence in the Donbas region from descending into a broader military conflict, peace advocates in the U.S. and abroad continue to urge the Biden administration to double-down on diplomatic efforts, as Common Dreamsreported earlier Tuesday.
“The United States,” said Sanders, “must now work with our allies and the international community to impose serious sanctions on Putin and his oligarchs, including denying them access to the billions of dollars that they have stashed in European and American banks.”
“The U.S. and our partners must also prepare for a worse scenario by helping Ukraine’s neighbors care for refugees fleeing this conflict,” Sanders continued, alluding to the possibility that Russian lawmakers’ approval of the use of military force outside the country could lead to a full-fledged war.
In the wake of recent developments in Ukraine, oil prices surged to nearly $100 per barrel on Tuesday, the highest in more than seven years, and European gas futures spiked by as much as 13.8%.
While the U.S. fossil fuel industry is expected to benefit from Germany halting approval of the Nord Stream 2 pipeline due to Russia’s recent actions, people in Europe—already struggling with skyrocketing energy bills—are bracing for even higher costs in the case that Moscow restricts gas exports.
“In the longer term,” said Sanders, “we must invest in a global green energy transition away from fossil fuels, not only to combat climate change, but to deny authoritarian petrostates the revenues they require to survive.”
Originally published on Common Dreams by KENNY STANCIL and republished under a Creative Commons (CC BY-NC-ND 3.0)
“A large across-the-board increase in interest rates is a cure worse than the disease,” says economist Joseph Stiglitz. “That might dampen inflation if it is taken far enough, but it will also ruin people’s lives.”
As the U.S. Federal Reserve mulls hiking interest rates in the coming weeks in an effort to curb inflation, progressive economists are warning against such a move—arguing that it will hurt workers and fail to address the real source of rising prices: unmitigated corporate power.
“The last thing average working people need is for the Fed to raise interest rates and slow the economy further.”
“A large across-the-board increase in interest rates is a cure worse than the disease,” Joseph Stiglitz, a Nobel laureate in economics and Columbia University professor, wrote Monday in Project Syndicate. “We should not attack a supply-side problem by lowering demand and increasing unemployment. That might dampen inflation if it is taken far enough, but it will also ruin people’s lives.”
Josh Bivens, director of research at the Economic Policy Institute, echoed Stiglitz’s message, writing Monday: “The inflation spike of 2021 has been bad for typical families and is a real policy challenge. But it remains the case that an overreaction to it could end up causing the most damage of all.”
Stiglitz and Bivens’ essays came three days after Robert Reich, professor of public policy at the University of California, Berkeley, made a similar warning.
Fed policymakers are poised to raise interest rates at their March meeting and then continue raising them, in order to slow the economy. They fear that a labor shortage is pushing up wages, which in turn are pushing up prices—and that this wage-price spiral could get out of control.
It’s a huge mistake. Higher interest rates will harm millions of workers who will be involuntarily drafted into the inflation fight by losing jobs or long-overdue pay raises. There’s no “labor shortage” pushing up wages. There’s a shortage of good jobs paying adequate wages to support working families. Raising interest rates will worsen this shortage.
Although Federal Reserve Chair Jerome Powell “has expressed concern about wage hikes pushing up prices,” Reich wrote, “there’s no ‘wage-price spiral.'”
“To the contrary, workers’ real wages have dropped because of inflation,” he added. “Even though overall wages have climbed, they’ve failed to keep up with price increases—making most workers worse off in terms of the purchasing power of their dollars.”
Reich conceded that “wage-price spirals used to be a problem” but argued that’s no longer the case “because the typical worker today has little or no bargaining power.”
Declining union membership and corporations’ increased mobility—both key pillars in the ruling class’ highly effective assault on workers that has been carried out on a bipartisan basis for more than four decades—”have shifted power from labor to capital,” wrote Reich. “Increasing the share of the economic pie going to profits and shrinking the share going to wages… ended wage-price spirals.”
It is “totally wrong” to contend that inflation is being fueled by rising wages stemming from a so-called “tight” labor market, Reich argued. He continued:
The January jobs report shows that the U.S. economy is still 2.9 million jobs below what it had in February 2020. Given the growth of the U.S. population, it’s 4.5 million short of what it would have by now had there been no pandemic.
Consumers are almost tapped out. Not only are real (inflation-adjusted) incomes down, but pandemic assistance has ended. Extra jobless benefits are gone. Child tax credits have expired. Rent moratoriums are over. Small wonder consumer spending fell 0.6% in December, the first decrease since last February.
“Given all this, the last thing average working people need is for the Fed to raise interest rates and slow the economy further,” Reich added. “The problem most people face isn’t inflation. It’s a lack of good jobs.”
When it comes to what is causing inflation, Reich blamed “continuing worldwide bottlenecks in the supply of goods, and the ease with which big corporations (with record profits) are passing these costs to customers in higher prices.”
Corporate greed has played a large role in why people are paying higher prices for food and gas, as Common Dreams has reported and a majority of the public appears to understand, based on recent polling. Amid a public health crisis that has claimed the lives of more than 900,000 people in the U.S. and 5.7 million people globally, price-gouging corporations are enjoying mega-profits not seen since 1950.
While pandemic profiteering is evident, the question remains as to what made global supply chains so fragile to disruption in the first place—leading to prolonged shortages of key inputs and increased shipping costs that have been accompanied by price hikes.
According to Rakken Mabud, chief economist and managing director of policy and research at the Groundwork Collaborative, the answer lies in offshoring, financialization, deregulation, just-in-time logistics, and other profit-maximizing policies associated with neoliberalization and globalization.
Mabud made that case last week when testifying at a House Energy and Commerce Committee hearing. She and David Dayen, executive editor of The American Prospect, expanded on that argument in a recent essay introducing a new series on the supply chain crisis.
As a number of economists have warned recently, policymakers on the verge of making life-altering decisions with respect to interest rates may be doing so based on faulty data or misconceptions.
“Among the biggest job gains in January were workers who are normally temporary and paid low wages (leisure and hospitality, retail, transport and warehousing),” Reich cautioned. “This January employers cut fewer of these low-wage temp workers than in most years, because of rising customer demand and the difficulties of hiring during Omicron. Due to the Bureau of Labor Statistics’ ‘seasonal adjustment,’ cutting fewer workers than usual for this time of year appears as ‘adding lots of jobs.'”
Stiglitz, meanwhile, noted that “the inflation rate has been volatile. Last month, the media made a big deal out of the 7% annual inflation rate in the United States, while failing to note that the December rate was little more than half that of the October rate.”
“Moreover, given that a large proportion of today’s inflation stems from global issues—like chip shortages and the behavior of oil cartels—it is a gross exaggeration to blame inflation on excessive fiscal support in the U.S.,” Stiglitz continued.
While “the U.S. has slightly higher inflation than Europe,” he added, “it also has enjoyed stronger growth. U.S. policies prevented a massive increase in poverty that might have occurred otherwise. Recognizing that the cost of doing too little would be huge, U.S. policymakers did the right thing.”
Stiglitz wrote that his “biggest concern is that central banks will overreact, raising interest rates excessively and hampering the nascent recovery. As always, those at the bottom of the income scale would suffer the most in this scenario.”
“What we need instead,” he argued, “are targeted structural and fiscal policies aimed at unblocking supply bottlenecks and helping people confront today’s realities.”
For instance, wrote Stiglitz, “food stamps for the needy should be indexed to the price of food, and energy (fuel) subsidies to the price of energy.”
“Beyond that, a one-time ‘inflation adjustment’ tax cut for lower- and middle-income households would help them through the post-pandemic transition,” he added. “It could be financed by taxing the monopoly rents of the oil, technology, pharmaceutical, and other corporate giants that made a killing from the crisis.”
Originally published on Common Dreams by KENNY STANCIL and republished under a Creative Commons license (CC BY-NC-ND 3.0)
Starbucks on Tuesday reported a 31% increase in profits during the final three months of 2021, but the massive Seattle-based coffee chain nevertheless announced plans to further hike prices this year, drawing outrage from critics who say the company is pushing higher costs onto consumers to pad its bottom line.
“Corporations are jacking up prices on consumers and using concerns about inflation as cover to do so.”
Starbucks CEO Kevin Johnson—who saw his compensation soar by 39% to $20.4 million in 2021—told investors during the company’s earnings call Tuesday that “supply-chain disruptions” and rising labor costs are to blame for the coming price increases, of which he suggested there will be several.
“We have additional pricing actions planned through the balance of this year, which play an important role to mitigate cost pressures including inflation,” said Johnson, who also touted the company’s “strong revenue growth” in the quarter.
Starbucks’ revenue grew to $8.1 billion at the tail-end of 2021, a 19% jump compared to the previous year.
To progressive observers, Starbucks’ announcement of price hikes fits a pattern of U.S. corporations—in sectors across the economy—raising costs for consumers while raking in record profits, boosting executive pay, and squeezing regular employees. Starbucks employees nationwide are increasingly fighting back against their low wages and poor working conditions by launching union drives.
Historian Andy Lewis argued that Starbucks’ explanation for the impending price increases amounts to nothing more than “word salad to hide corporate greed.”
The consumer advocacy group Public Citizen, for its part, responded with outrage to Starbucks increasing prices for customers after giving its CEO a nearly 40% raise last year.
During testimony before the House Energy and Commerce Committee on Wednesday, Rakeen Mabud of the Groundwork Collaborative noted that “in sector after sector, in company after company, corporations are jacking up prices on consumers and using concerns about inflation as cover to do so.”
“We see that in Kimberly-Clark taking advantage of the pandemic to raise prices on masks,” the economist said. “We see Proctor & Gamble using the fact that they sell essential goods that families depend on like diapers to raise prices in this moment of crisis. And we even see companies like McDonald’s raising prices on consumers even as they enjoy massive increases in sales.”
“So in short,” Mabud added, “this is a really broad-based problem—it’s unfortunately not limited to a specific sector of the economy.”
Originally published on Common Dreams by JAKE JOHNSON and republished under a Creative Commons license (CC BY-NC-ND 3.0)
Above: Collage by Lynxotic, Original Photo by Unsplash
“Wall Street’s toxic fossil fuel investments threaten the future of our planet and the stability of our financial system and put all of us, especially our most vulnerable communities, at risk.”
Fueling fresh calls for swift, sweeping action by President Joe Biden and financial regulators, a report published Tuesday reveals that if the planet-heating pollution of the 18 largest U.S. asset managers and banks is compared to that of high-emissions countries, Wall Street is a top-five emitter.
“Financial regulators have the authority to rein in this risky behavior, and this report makes it clear that there is no time to waste.”
The new report—entitled Wall Street’s Carbon Bubble: The global emissions of the U.S. financial sector—was released by the Center for American Progress (CAP) and Sierra Club. The analysis was done by South Pole, which replicated an approach it used earlier this year for a U.K.-focused effort commissioned by Greenpeace and the World Wide Fund for Nature (WWF).
Though likely a “gross underestimate,” as Sierra Club put it, because the analysis relies on public disclosures that exclude key data, the researchers found that “just the portions of the portfolios of the eight banks and 10 asset managers studied in this report financed an estimated total of 1.968 billion tons CO2e based on year-end disclosures from 2020.”
Putting that CO2e—or carbon dioxide equivalent, which is used to compare emissions from various greenhouse gases—figure into context, the report notes:
If the financial institutions (FIs) in this study were a country, they would have the fifth largest emissions in the world, falling just short of Russia;
Financed emissions from the 18 institutions covered in this report are equivalent to 432 million passenger vehicles driven for one year;
Financed emissions from the eight banks studied in this report are equivalent to 80 million homes’ energy use for one year; and
Financed emissions from the 10 asset managers studied in this report are equivalent to three billion barrels of oil consumed.
The banks analyzed are Bank of America, Bank of New York (BNY) Mellon, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, State Street, and Wells Fargo.
The asset managers included are BNY Mellon Investment Management, BlackRock, Capital Group, Fidelity Investments, Goldman Sachs Asset Management, JPMorgan Asset Management, Morgan Stanley Investment Management, PIMCO, State Street Global Advisors, and the Vanguard Group.
When Wall Street is factored into the list of the world’s top 10 countries responsible for the most annual greenhouse gas emissions, it falls after China, the United States, India, and Russia but ranks ahead of Indonesia, Brazil, Japan, Iran, and Germany, according to Climate Watch data.
As the new publication warns:
The findings of this report make clear that the U.S. financial sector is a major contributor to climate change. Given that the indirect emissions of the U.S. financial sector are just below the total emissions of Russia, it should be considered a high-carbon sector and treated as such. Therefore, if President Biden and his administration do not put in place measures to mitigate U.S.-financed emissions, the United States will almost certainly fall far short of its targets to achieve a 50% to 52% reduction from 2005 levels in 2030 and net-zero emissions economy-wide by no later than 2050.
The implications of falling short would be dire. Continued unfettered emissions supported by the financial industry would mean that the deadly wildfires, droughts, heatwaves, hurricanes, floods, and other extreme weather events that Americans and communities around the world are already experiencing will only become worse, and efforts to mitigate emissions will only become more challenging and costly.
Representatives from the groups behind the report echoed its call to action in a statement Tuesday.
“Climate change poses a large systemic risk to the world economy. If left unaddressed, climate change could lead to a financial crisis larger than any in living memory,” said Andres Vinelli, vice president of economic policy at CAP. “The U.S. banking sector is endangering itself and the planet by continuing to finance the fossil fuel sector.”
Vinelli added that “because the industry has proven itself to be unwilling to govern itself,” regulators including the U.S. Securities and Exchange Commission and Office of the Comptroller of the Currency “must urgently develop a framework to reduce banks’ contributions to climate change.”
Ben Cushing, Sierra Club’s Fossil-Free Finance campaign manager, agreed that “regulators can no longer ignore Wall Street’s staggering contribution to the climate crisis.”
“The U.S. banking sector is endangering itself and the planet by continuing to finance the fossil fuel sector.”
“Wall Street’s toxic fossil fuel investments threaten the future of our planet and the stability of our financial system and put all of us, especially our most vulnerable communities, at risk,” he said. “Financial regulators have the authority to rein in this risky behavior, and this report makes it clear that there is no time to waste.”
The report comes as financial institutions worldwide face mounting criticism for their contributions to the climate emergency—including at the COP26 climate summit in Scotland last month—and as the Koch-funded American Legislative Exchange Council (ALEC) is pushing model legislation that opposes fossil fuel divestment.
More than three dozen climate advocacy groups argued Monday that “what ALEC claims to be discriminatory action”—referring to divestment from major polluters—”is instead prudent action to ensure the stability of our financial system and economy.”
“We know from the Great Recession that the financial sector won’t take responsibility,” the organizations noted. “It’s up to regulators to protect people from the impact on climate and financial risk of fossil fuel investment.”
Originally published on Common Dreams by JESSICA CORBETT and republished under a Creative Commons (CC BY-NC-ND 3.0)
“Institutions around the world must step up now and commit to joining the divest-invest movement before it is too late—for them, for the economy, and for the world.”
Over the past decade, nearly 1,500 investors and institutions controlling almost $40 trillion in assets have committed to divesting from fossil fuels—a remarkable achievement that climate campaigners applauded Tuesday, while warning that further commitments and action remain crucial.
“Divestment has helped rub much of the shine off what was once the planet’s dominant industry. If money talks, $40 trillion makes a lot of noise.”
“Amidst a depressing era in the race against climate change—with killer fires and titanic storms, political stalemate, and corporate greenwashing—the fossil fuel divestment movement is a source for tremendous optimism,” states a new report—entitledInvest-Divest 2021: A Decade of Progress Toward a Just Climate Future—published Tuesday.
“Ten years in, the divestment movement has grown to become a major global influence on energy policy,” the publication continues. “There are now 1,485 institutions publicly committed to at least some form of fossil fuel divestment, representing an enormous $39.2 trillion of assets under management. That’s as if the two biggest economies in the world, the United States and China, combined, chose to divest from fossil fuels.”
The paper—a joint effort between the Institute for Energy Economics and Financial Analysis, Stand.earth, C40, and the Wallace Global Fund—comes on the eve of the United Nations Climate Conference in Glasgow, and notes that the divestment movement “has grown so large that it is now helping hold fossil fuel companies accountable for the true cost of their unregulated carbon pollution.”
🚨 Today a new report “Invest-Divest '21: A Decade of Progress Towards a Just Climate Future”. Divestment of €33,7 trillion (!) from fossil fuels, this is more than the economies of the U.S. & China combined. A game-changing new milestone! ➡️https://t.co/j8ISxNUwgw (1/2) #COP26pic.twitter.com/URV3KDfOiD
Since the movement’s first summary report in 2014, the amount of total assets publicly committed to divestment has grown by over 75,000%. The number of institutional commitments to divestment has grown by 720% in that time, including a 49% increase in just the three years since the movement’s most recent report. The true amount of money being pulled out from fossil fuels is almost certainly larger since not all divestment commitments are made public.
The movement has now expanded far beyond its origins as a student-driven effort on college campuses. Divestment campaigners now target cities, states, foundations, banks, investment firms, and any player who participates in the global investment pool.
“Major new divestment commitments from iconic institutions have arrived in a rush over just a few months in late 2021,” the report notes, “including Harvard University, Dutch and Canadian pension fund giants PME and CDPQ, French public bank La Banque Postale, the U.S. city of Baltimore, and the Ford and MacArthur Foundations.”
Underscoring the paper’s assertion, ABP, Europe’s largest pension fund announced Tuesday that it would stop investing in fossil fuel producers.
“Divestment remains a critical strategy for the climate movement,” the publication states. “It must be combined with an accelerated push for investment in a just transition to a clean, renewable energy future if the world is to avoid a future of worsening human injustice and irreversible ecological damage. Financial arguments against divest-invest no longer hold water.”
Bill McKibben, co-founder of the climate action group 350.org, wrote in a Tuesday New York Times op-ed that “divestment has helped rub much of the shine off what was once the planet’s dominant industry. If money talks, $40 trillion makes a lot of noise.”
“This movement will keep growing, and keep depriving Big Oil of both its social license and its access to easy capital,” McKibben said in a separate statement introducing the new report.
Huge new report today: Divestment commitments have now hit $39.42 trillion, or more than the combined GDP of US and China. Such thanks to the millions of people who made this happenhttps://t.co/pI0YFmAw93
The report’s authors contend that institutional investors must agree to three principles “if they want to be on the right side of history and humanity”:
Immediately and publicly commit to fully divesting from and stopping all financing of coal, oil, and gas companies and assets;
Immediately invest at least 5% of their assets in climate solutions, doubling to 10% by 2030—including investments in renewable energy systems, universal energy access, and a just transition for communities and workers—while holding companies accountable to respecting Indigenous and other human rights and environmental standards; and
Adopting net-zero plans that both immediately cut investments in fossil fuels and ensure that all other assets in their portfolio develop transition plans that reduce absolute emissions by 50% before 2030.
“Institutional investors everywhere are beginning to come to terms with the danger that fossil fuels pose to their investment portfolios, their communities, and their constituencies,” the report states. “This realization is important but it is not enough. Institutions around the world must step up now and commit to joining the divest-invest movement before it is too late—for them, for the economy, and for the world.”
“Societies, economies, and the climate are all changing,” the paper concludes. “The financial world will have to change with them.”
We went wild when we got our first divestment commitment: Unity College’s $13.5 million endowment.
The idea that the movement has now grown to 1,485 institutions representing $39.2 TRILLION is mind-blowing. https://t.co/mTFxihBKBl
Rev. Lennox Yearwood Jr., president and CEO of Hip Hop Caucus, said in a statement that “the climate crisis is here, and so are climate solutions. We know communities of color are disproportionately impacted by the climate crisis here in the U.S. and across the world. In order to create a just future, we must divest from fossil fuels and invest in communities on the frontlines of the climate crisis.”
“It is not enough to divest from only some fossil fuels or with only some of your portfolio—all investors must immediately divest all fossil fuels from all of their portfolio, while investing in climate solutions.”
Yearwood added that “over 10 years the divest-invest movement has become one of the most powerful global forces in a just transition to a clean energy future.”
Ellen Dorsey, executive director of the Wallace Global Fund, said that “the activist-driven divestment movement has yielded unprecedented and historic results in moving tens of trillions of dollars out of the industry driving the climate crises and exposing its failing business model.”
“But investors need to do more,” she argued. “It is not enough to divest from only some fossil fuels or with only some of your portfolio—all investors must immediately divest all fossil fuels from all of their portfolio, while investing in climate solutions with at least 5% of their portfolios, scaling to 10% rapidly.”
“Mission investors have a unique role to play to ensure the energy transition is a just one and that all people have access to safe, clean and affordable energy by 2030,” Dorsey added. “To do anything less does not address the scale or pace of this climate crisis.”
Originally published on Common Dreams by BRETT WILKINS and republished under a Creative Commons License (CC BY-NC-ND 3.0)
“Oil and gas executives have lied to the American people for decades about their industry’s role in causing climate change. It’s time they were held accountable.”
Democratic leaders on the U.S. House Oversight and Reform Committee sent letters Thursday inviting the heads of key fossil fuel companies and lobbying groups to testify before the panel about the industry’s contributions to climate disinformation in recent decades.
Applauded by advocates of holding polluters and their business partners accountable for fueling the worsening climate emergency, the letters come amid concerns about how corporate lobbyists may influence a bipartisan infrastructure bill and the Build Back Better package—especially in the wake of a damning exposé on ExxonMobil earlier this summer.
Reps. Carolyn Maloney (D-N.Y.) and Ro Khanna (D-Calif.), who respectively chair the House panel and its Environment Subcommittee, wrote that “we are deeply concerned that the fossil fuel industry has reaped massive profits for decades while contributing to climate change that is devastating American communities, costing taxpayers billions of dollars, and ravaging the natural world.”
“We are also concerned that to protect those profits, the industry has reportedly led a coordinated effort to spread disinformation to mislead the public and prevent crucial action to address climate change,” the pair continued.
They also expressed concern that such “strategies of obfuscation and distraction continue today,” noting that “fossil fuel companies increasingly outsource lobbying to trade groups, obscuring their own roles in disinformation efforts.”
“One of Congress’s top legislative priorities is combating the increasingly urgent crisis of a changing climate,” the lawmakers added. “To do this, Congress must address pollution caused by the fossil fuel industry and curb troubling business practices that lead to disinformation on these issues.”
ExxonMobil CEO Darren Woods, BP America CEO David Lawler, Chevron CEO Michael Wirth, Shell president Gretchen Watkins, American Petroleum Institute (API) president Mike Sommers, and U.S. Chamber of Commerce president and CEO Suzanne Clark (pdfs) now have a week to inform Democrats if they plan to willingly testify at the panel’s October 28 hearing.
This is a historic opportunity to do something about the damage the fossil fuel industry has done to our planet and our health and I intend to make the most of it.
Pointing to industry leaders’ past behavior, Accountable.US president Kyle Herrig said that “these polluters have long proven they’re more concerned with boosting their executives’ bottom lines than with protecting the climate. The only question is: will they defend their harmful actions before Congress? Or will they again refuse to answer to the American people?”
The Democrats also requested information from the firms, including internal communications and memos about climate science and related marketing as well as plans to reduce planet-heating emissions across the industry. If the letter recipients refuse to participate or turn over those materials, the panel’s leaders may issue subpoenas.
Richard Wiles, executive director of the Center for Climate Integrity, celebrated the letters in a statement that acknowledged other efforts to hold the industry accountable, including more than two dozen lawsuits filed by state and local governments in recent years.
“We applaud Chairs Maloney and Khanna for demanding that these executives answer for their history of climate deception,” he said. “Oil and gas executives have lied to the American people for decades about their industry’s role in causing climate change. It’s time they were held accountable. If the executives refuse to testify voluntarily, they should be subpoenaed.”
In a video released earlier this month, Khanna vowed that the panel’s probe of the fossil fuel industry’s role in climate disinformation “will be like the Big Tobacco hearings” of the 1990s.
Harvard University researcher Geoffrey Supran—whose academic publications include the first peer-reviewed analysis of ExxonMobil’s 40-year history of climate communications—said at the time that “it’s no surprise that Big Oil and Big Tobacco have used the same propaganda playbook to confuse the public and undermine political action, because they rely on many of the same PR firms and advertising agencies to do their dirty work.”
Ad and PR agencies are under mounting pressure to ditch fossil fuel clients for good, thanks in part to the Clean Creatives campaign supported by Fossil Free Media, both of which welcomed the letters.
YES! I think this is a landmark day in the climate fight.
These sorts of hearings ended Big Tobacco's stranglehold over our political process. They need to do the same for Big Oil.
“This is a landmark day in the climate fight,” said Fossil Free Media director Jamie Henn, noting the impact of the tobacco hearings. “For decades, the fossil fuel industry has polluted our political process along with polluting our atmosphere. Exposing the industry’s disinformation is a critical step in holding it accountable for the damage it has done and clearing the way for meaningful change.”
Clean Creatives campaign director Duncan Meisel suggested that “this investigation is the beginning of the end of misleading fossil fuel advertising and PR in the United States.”
“For too long, this industry has used fake front groups, advanced greenwashing, and straight up deception to delay climate action, every time with the willing help of some of the biggest ad and PR firms in the world,” he said. “Reps. Khanna and Maloney are following in the footsteps of congressional investigations that devastated the reputations of tobacco companies and their advertisers. Fossil fuel companies and their agencies are now on notice that they are next.”
Recent White House Study on Taxes Shows the Wealthy Pay a Lower Rate Than Everybody Else
A decade ago, in an essay for The New York Times, Warren Buffett disclosed that he had paid nearly $7 million in federal taxes in 2010. “That sounds like a lot of money,” he wrote. “But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.”
The words “taxable income” are doing a lot of work in that sentence.
Buffett owns a substantial number of shares in Berkshire Hathaway, the fabulously successful holding company he founded decades ago. As the company’s shares have soared nearly every year, his wealth has grown by billions. Under the U.S. tax code, none of that is taxed until he sells shares at a profit.
A little math shows that Buffett’s 17.4% rate meant he reported roughly $40.2 million in income in a year where Forbes said his wealth grew by $3 billion. His revelation made it possible to compare how much he was paying the government to the increase in the size of his fortune.
No one did so, and Buffett became something of a folk hero for calling for any increase in taxes.
When we obtained access to a trove of tax data on the richest Americans, it quickly became clear to our reporters that Buffett’s comparison of his own tax rate to his employees’ vastly understates the inequity of our tax system. Buffett is far from unique; the documents showed that the amount of money people like Michael Bloomberg, Jeff Bezos or Elon Musk reported to the IRS as income was infinitesimal when measured against their annual gains in wealth.
And so the first story in our “Secret IRS Files” series set out a new concept that makes more sense in our 21st century Gilded Age; we called it “the true tax rate.” We compared the annual taxes paid by the ultrarich to their wealth gains to give readers a sense of how the system really works.
From 2014 to 2018, we pointed out, Buffett paid $125 million in federal taxes. As he said, that sounds like a lot. But according to Forbes, his riches rose $24.3 billion during that period, making his true tax rate 0.1%. In a detailed written response, Buffett defended his practices but did not directly address ProPublica’s true tax rate calculation.
When we published this story, howls of rage rang out from the freewheeling corners of Twitter to the ornate offices on Wall Street. Some of the most irate critics wrote to me directly and demanded to know whether I was so @#$!@ stupid that I didn’t understand the meaning of the word “income tax.”
“This story, sadly, reeks with ‘class envy,’” one angry reader wrote. “If this was intended to get clicks, you made your money.” We’re a nonprofit and our revenue from advertising adds almost nothing to our annual budget, but I understand this reader’s larger point, which we noted in the story: The ultrarich are doing only what the current tax code invites them to do.
The debate intensified, and the White House-backed proposals on taxes advanced by congressional Democrats largely followed the traditional approach of raising rates on income. A separate bill introduced by Sens. Elizabeth Warren and Bernie Sanders to impose a 3% tax on all wealth above $1 billion is seen as having little chance of passing.
The reluctance to embrace a wealth tax is deeply rooted. The biggest donors to both parties would be hit hard by such a law. And as we pointed out in our initial story, the complexities of taxing wealth are not trivial. Several countries have tried and struggled to figure out a fair way to tax stock gains. Does an entrepreneur whose stock skyrockets in one year, and pays a big tax, deserve a rebate if his company’s shares plummet the next year?
All of that said, we took note when White House economists issued a study that used publicly available data to estimate “the average Federal individual income tax rate paid by the 400 wealthiest American families’ in recent years, determined using a more comprehensive measure of income.” Their methodology was similar to ours, and their findings — that those families gained $1.8 trillion from 2010 to 2018 and paid 8.2% in taxes — are in line with what we found in the tax data.
The authors say their findings are evidence in support of President Joe Biden’s plan for tweaking the existing system; the words “wealth tax” are not mentioned. They point to the administration’s proposal to impose higher tax rates on stock dividends and on capital gains, the profit an investor reaps when selling a stock whose value has risen.
(The Biden administration has proposed getting rid of a provision in the tax code that shields heirs who inherit stock from paying capital gains tax on the growth in value that occurred before the shares were transferred.)
None of the proposed changes come close to addressing the biggest hole in the system, which is that an ultrarich person can live comfortably off gains in wealth while never selling a single share. As our initial story pointed out, the Buffetts and Bezos of the world can borrow against the value of their considerable holdings and live comfortably without selling stock or receiving any income from dividends, which new companies like Tesla and Amazon don’t pay.
The strategy, known as “buy, borrow and die,” allows the wealthy to amass fast fortunes, pay no taxes on those gains and pass on much of the wealth to their descendants.
Herb and Marion Sandler, the founders of ProPublica, made it clear from the outset that they hoped our journalism would spur real-world change. They were not particularly interested in stories whose biggest effect was that they had “started a conversation.”
We still measure our success by tangible effects. But over the years, we have seen that the road to impact on very complex issues can begin by changing the conversation.
Lawmakers have said that some of the most egregious tax loopholes we’ve exposed, notably multibillion-dollar Roth IRA accounts, will be scrutinized as Congress takes up tax legislation in coming months.
There’s no telling where the larger conversation about taxing wealth will lead. As the White House paper suggests, a new way of thinking about equality and taxation has taken center stage. Whether that ultimately results in change remains very much an open question.
“Ever notice how ‘deficit hawks’ vote for record-high defense spending, yet claim bills that help people and challenge lobbyists are ‘too much?'” asked Rep. Alexandria Ocasio-Cortez.
Sen. Joe Manchin on Thursday derided his own party’s plan to spend $3.5 trillion over the next decade to combat the climate crisis, invest in child care, and expand Medicare as “fiscal insanity.”
“All this operatic moaning about $3.5 trillion is ridiculous hypocrisy. Manchin has casually voted for nearly three times that for defense spending.”
But progressive lawmakers and commentators were quick to point out that Manchin (D-W.Va.)—along with other conservative Democrats who are currently standing in the way of Democrats’ reconciliation package—have had no problem greenlighting the Pentagon’s increasingly bloated budget year after year after year.
“Ever notice how ‘deficit hawks’ vote for record-high defense spending, yet claim bills that help people and challenge lobbyists are ‘too much?'” Rep. Alexandria Ocasio-Cortez (D-N.Y.) asked in a tweet Thursday evening.
“All this operatic moaning about $3.5 trillion is ridiculous hypocrisy. Manchin has casually voted for nearly three times that for defense spending”
Noting that the reconciliation package includes yearly spending of $350 billion while the proposed military budget for Fiscal Year 2022 is $770 billion, the New York Democrat wrote: “Guess which got rubber stamped and which gets deemed a ‘spending problem.'”
Last week, the House of Representatives passed the $770 billion military policy bill—which includes $740 billion for the Pentagon alone–by a vote of 316-113, with just 38 Democrats voting no. The Senate is expected to pass its version of the National Defense Authorization Act in the coming days.
In a column published late Thursday, The Week‘s Ryan Cooper observed that Manchin “voted for every single one of the military budgets over the last decade—in 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, and 2020.”
“He voted for all $9.1 trillion,” Cooper wrote. “While he occasionally complained about wasteful military programs and asked for an audit of the Pentagon, these quibbles were never enough to get him to vote differently. He helped inflate the already-bloated war budget and regularly boasted about thus ‘supporting’ the troops. This year, he did it again.”
“So on one level, all this operatic moaning about $3.5 trillion is ridiculous hypocrisy,” Cooper continued. “Manchin has casually voted for nearly three times that for defense spending—money that killed hundreds of thousands of people and turned half the Middle East into a smoking crater. A modest fraction of that total to help parents pay their bills, give seniors dental coverage, fight climate change, and so forth is not some intolerable burden on the economy.”
West Virginia activists in kayaks presented that critique directly to Manchin on Thursday as the Democratic senator listened from his yacht:
In ongoing talks over the reconciliation package, Manchin is pushing for a top-line spending level of $1.5 trillion. That figure is at least $2 trillion less over 10 years than Democrats’ current plan, which would spend $3.5 trillion over the next decade.
As Win Without War executive director Stephen Miles noted Thursday, Manchin’s preferred $1.5 trillion number is “less than we’ll spend at the Pentagon over the next two years.”
“And Manchin’s talking about a DECADE of spending across the entire rest of the government,” Miles wrote on Twitter. “During that time we’ll spend somewhere north of $8 trillion, possibly closer to $10 trillion. Just. at. the. Pentagon.”
Originally published on Common Dreams by JAKE JOHNSON and republished under a Creative Commons license (CC BY-NC-ND 3.0).
China is at the forefront of government opposition to cryptocurrencies
The central bank of China stated as a declaration that all transactions involving Bitcoin and any “virtual” currencies illegal, according to the AP.
This seems to be an escalation of the various methods being used to block and prohibit the use of any currency or “money” outside the direct control of the Chinese government.
In a notice released by the central bank the reasoning was elaborated on – stating that digital currencies such as Bitcoin, Ethereum and others disrupt the current financial system and encourage and help facilitate money-laundering and other crimes.
“Virtual currency derivative transactions are all illegal financial activities and are strictly prohibited,”
–the People’s Bank of China
The price of Bitcoin fell, to $41,180, in the hours after the announcement. Other major cryptocurrencies also fell. . Ethereum dropped almost 10%, falling from $3,100 to around $2,758.
Those levels appeared to be a short term low as there has been a recovery bounce since the initial reaction selloff.
China is gearing up for it’s own ‘innovations’ involving digital currencies and transactions
This clampdown follows the banning of Bitcoin mining and an exodus of a large number of Chinese mining operations, many relocating to the US, Europe, Southeast Asia and elsewhere. At the peak, Chinese miners accounted for around 3/4 of the world’s electricity consumption related to crypto mining, according to the Cambridge Bitcoin Electricity Consumption index.
That share is still the highest, though far lower, with the USA being the second largest consumer of electricity used for Bitcoin mining.
There is a worldwide “showdown” of sorts building, with cryptocurrency adherents touting, often with great resolve, the privacy, anonymity and “freedom” of using the coins, while many governments, China, and Turkey being outspoken, consider the potential losses that could come from allowing private actors to control financial transactions.
Although fiat currencies all have cash, paper bills, that can also be used anonymously, the potential criminal laundering has government controls and laws in place to minimize (or at least attempt to minimize) the magnitude of the problem.
tumbles
Governments getting increasingly worried as crypto adoption continues to expand worldwide
Many governments, including the People’s Bank of China, are developing electronic versions of the local fiat currency, such as China’s yuan for example. to facilitate cashless transactions which, unlike with Bitcoin, can be more easily tracked and controlled by the local authorities, communist or otherwise.
Calls and warning are also building with Regulators in many countries, including the US, warning of the dangers and emphasizing that they want cryptocurrencies to have greater oversight.
For example, Gary Gensler, chairman of the Securities and Exchange Commission, recently said that investors need more protection in the cryptocurrency market, calling the current state of the largely unregulated market “rife with fraud, scams and abuse” and compared it to the “Wild West.”
The SEC has already cracked down on cases of alleged freud involving crypto, but Gensler believes that the agency will need more authority from Congress to and funding to adequately regulate the market..
As a result, miners have been moving operations out of China.
Two years ago, China alone accounted for around three-quarters of all the electricity used for crypto mining, by far the most in the world, according to the Cambridge Bitcoin Electricity Consumption index.
Expect more government announcements involving crypto and new ways to try to control or inhibit its proliferation
The looming showdown appears heading for a significant and dangerous climax, with both sides, crypto enthusiasts and private holders and users of the coins on the one side, and, in some cases, terrified governments on the other wanting to outlaw and stamp out the entire sector.
In the US this will be difficult, with so many high profile and powerful individuals and companies already embracing the idea that the future will contain, at least for the foreseeable time frame, both the government controlled fiat system and the surging and diverse cryptocurrency systems.
As reported from Reuters, in the 80 page new complaint, the U.S. Federal Trade Commission (FTC) accuses Facebook of illegally monopolizing power. The refiled case includes additional evidence which is intended to support FTC’s case that Facebook dominates the U.S. personal social networking market.
In the headline of its press release, FTC alleges the company resorted to “illegal buy-or-bury- scheme to crush competition after string of failed attempts to innovate”.
“Despite causing significant customer dissatisfaction, Facebook has enjoyed enormous profits for an extended period of time suggesting both that it has monopoly power and that its personal social networking rivals are not able to overcome entry barriers and challenge its dominance,”
AMENDED complaint – federal trade COMMISSION
The FTC voted 3-2 to file the amended lawsuit. They also denied Facebook’s request that Lina Khan be recused, Khan participated in the filing of the new complaint.
ProPublica drops a second monumental article based on treasure trove of IRS, SEC & court data
Excellent reporting of tax injustices among the obscenely rich continues with a huge and revelatory piece on Peter Thiel and his “little” Roth IRA scheme. Going well beyond the previous article that detailed how Bezos, Musk, Buffet and others all use loans secured with share holdings to avoid income, and thus avoid paying tax the “Lord of the Roths” is even more explosive.
While the emphasis of the article on Thiel’s Roth IRA takes on the task of trying to somehow compare an “average” investor’s potential gains with the unimaginable magnitude of Thiel’s windfall, this is something that makes sense as a valid perspective, but the obscenity is nearly lost in the opaque fog of numbers beyond comprehension.
For example: your Peter is basically gifted 1.7 million shares by the company he was one of the founders of (along with Elon Musk and the rest of the so called “PayPal Mafia). That “purchase” costing less than $2000 based on the ridiculous price of $0.001 per share was used to found a Roth IRA.
The engineered numbers were no accident: at the time, in 1999, a Roth IRA account had a maximum allowable contribution amount of $2,000. Since the shares were “below fair value”, the fact of which was admitted by PayPal in an SEC filing from the time just before the company went public, the value increased massively, by 227,490% in the first year. Which increased the value of the paltry $2k up to $3.8 million.
Though obviously not enforced, regulations at the time forbade this kind of “stuffing”. Meaning, the initial trade that launched this scheme was possibly illegitimate, if not unlawful. Or, as ProPublica more kindly phrased it: “Investors aren’t allowed to buy assets for less than their true value through an IRA. “
As a matter of fact, according to the article, the “stuffing” was so successful that no further contributions were ever made into the account after that initial 1999 sum.
Since a Roth IRA allows a person to trade stocks within the account tax free, as long as no withdrawals are made, this large but still comprehensible sum was the start of a 20 year use of the tax statutes to build a fortune of over $5 billion without paying a single penny in tax.
Hitting $870 million in value by 2008, by 2019 the tax free enterprise, built on the less than $2000 initial contribution (stock “purchase”), ultimately ballooned to 96 sub-accounts with holdings of $5 billion.
Ok, so that’s the short summary of the mind blowing numbers. For a more detailed account, by all means visit the original article.
The numbers are outrageous, but the entitlement and arrogance is on a whole other level
The part of the story that should spark outrage is not in the numbers but begins where the almost inhuman greed, hubris and hypocrisy at this good fortune grows apace with the size of the tax free bonanza. Because Peter Tiel is not just any run-of-the-mill untaxed billionaire.
The endlessly expanding windfall he received, tax free, did not engender a mindset of charity or gratefulness at his miraculous providence.
Above: Photo Collage / Lynxotic
Instead Thiel, once the wealth lent him a position of power, preached and pushed the idea that the US government, the same one that he was able to avoid paying taxes to, was guilty of over-taxing people like him (and poor people too).
He spent millions of dollars in an effort to influence Republican politicians and groups that have anti-tax agendas, to change the laws in ways that would add even more advantages to his already preposterously privileged position. Then this: as per ProPublica: “In 2016, he became the rare Silicon Valley titan to endorse Donald Trump.”
And, in an arrogance that is as incomprehensible as the size his effortlessly expanding fortune, he espouses the belief that people like him are entitled to these kind of spoils because, after all, without him we might have to live without PayPal and….wait for it…. Facebook.
Yes, you heard that right. In 2004, Thiel used his IRA to buy $500,000 worth of shares in a, then private, company called Facebook, which was the first big outside investment in Zuckerberg’s soon to be massive monstrosity.
By using his IRA funds to buy shares of the start-up he was able to avoid tax on all the future gains of those shares. (ProPublica, in excellent investigative reporting, uncovered this tidbit by combing though Facebook court documents).
So, again, ostensibly, based on his well known statements, we are not only to congratulate him on his clever method of avoiding any taxation whatsoever on the first gambit with the PayPal shares, but we ought to effusively thank him for helping Facebook to become the dangerous purveyor of surveillance and phantom tollbooth Ponzi empire that is it today?
In perhaps one of the greatest illustrations of how power corrupts, this idea that because he was able to amass a fortune on such a massive scale without the burden of any tax whatsoever, he is somehow a hero to be emulated, is the real reason for us to be outraged.
That an average person might be lucky to turn $2000 into $250,000 over two decades, as was illustrated in detail in the article, while Thiel easily turned it into $5 billion, is outrageous, yes.
But the real “crime” is that it was done with zero benefit to anyone except him and other Silicon Valley insiders at companies like PayPal and Facebook.
Could it be argued that Facebook is a gift to humanity? Well, in 2021 that would be a tough argument to put forth without being laughed out of the room. And PayPal? It’s doubtful that Satoshi Nakamoto has to fear competition from any of the PayPal Mafia (including Mr. Musk) when the crown for greatest financial innovator of the century is awarded.
In a revelation that could have received more page inches, the article also exposes a second, possibly more plausible reason, regarding why Thiel went to great lengths to bankrupt Gawker Media, which he blamed for outing him as Gay. That politically convenient motivation could very well have covered up the real reason:
Again, as per ProPublica:
“In a story headlined, “Give Me Liberty or Give Me Taxpayer Money,” Gawker Media, citing anonymous sources, revealed that Thiel held his Facebook investment in a tax-free Roth.”
Companies built on greed and hubris create nothing and, in the end, die
Thiel believes he will live to be 120 years old. Based on his comments and writings he appears to believe that the world would benefit from that eventuality.
But when looking at the companies he helped to build, and the obscene fortune he was rewarded with for binging them into being, it seems like most of us, after accessing his life’s works and “accomplishments”, would be more thankful for the improbability of that dream coming true.
2087? That will be the year that either Utopia or Oblivion will have arrived for humanity and the planet earth. If by a miracle an earthly Utopia comes to be, it is highly unlikely that PayPal, Facebook or Mr. Thiel will have had any hand in bringing it about.
Above: Jack Dorsey & Elon Musk – Photo – various / tesla / Twitter / collage Lyxotic
Possibly staged “Twitter feud over BitCoin” leads to portentous upcoming event: “THE talk”
Although both Jack Dorsey, head of both Twitter and Square, and Elon Musk are long standing and staunch BitCoin advocates, a lot of chatter around the internet has painted Musk as having gone soft on the crypto currency.
Th narrative that has been put forth pits his loyalty to Bitcoin as somehow incongruous with his support for DogeCoin, the somewhat less serious AltCoin variant he has openly championed.
Intermingled with this straw-man charade, is the also over-hyped idea that the energy used by BitCoin mining is a factor in global warming and therefore a stain on Musk’s otherwise high profile positive sustainable energy resumé.
While many article have shown this argument to be blown out of proportion at best, apparently the whole world (China, if you’re listening) has seized on this talking point as a way to damage BitCoin’s popularity and pedigree.
The attempt to use this argument to undermine BitCoin’s adoption progress and futuristic pedigree appears to have already backfired, however. For example, at the recent BitCoin conference in Miami, Jack Dorsey announced plans to invest in a sustainable energy powered BitCoin mining facility.
Elon Musk has also stated via his twitter account that Tesla would resume accepting BitCoin payments, as soon as more miners switch to renewable energy. This coming after he had announced, to great fanfare, that Tesla would accept the cryptocurrency and then, in May, reversed the decision after backlash from those who pounced on the issue to try to tarnish Tesla’s sterling reputation as a proponent of the transition to sustainable energy.
Though not yet confirmed 100%, the Twitter exchange between the two titans implied that the “talk” would take place in conjunction with the “The B Word” BitCoin conference, which kicks off on July 21, 2021. Sponsored by Ark Invest, Square and Paradigm, the big name speakers and hype already building, along with the timing, coming on the heels of a huge peak then “crash” in the crypto markets, looks to be a watershed event for Bitcoin and cryptocurrencies in general.
Details on whether the exchange between the two will be live on stage or via video conference have, as of yet, not been revealed.
Twitter and Square CEO Dorsey tweeted Thursday about an upcoming “The B Word” bitcoin event, and Musk responded to it. It’s unclear if the event, which kicks off on July 21, will be virtual or in-person.
The potential for drama as the two discuss a topic on which they, for the most part agree, is a smart way to hype the event, both the conference itself and the monumental meeting for “THE Talk”.
Regardless of any fireworks or revelations coming out of the event and the meeting between these two incredibly influential business leaders, the upshot is that all of the above is a net positive for BitCoins progress toward more widespread adoption and acceptance.
Critical mass may already been achieved for crypto in the US
The overly manic focus on price fluctuations notwithstanding, there is a rapidly growing sense that the #1 cryptocurrency as well as all related coins and activities are reaching the point, in the US, that it will be impossible to return the genie to the bottle.
Any attempt to block or outlaw, in totality, the emerging world of crypto-finance, is likely to fail. Realizing this there appears to be a faint whisper of capitulation on the part of both the government in the US and among the “old guard” establishment, namely Wall Street.
Dorsey’s take, as quoted from his appearance at the BitCoin conference in Miami:
“Governments are trying to block cryptocurrency use to avoid losing hold of power”
“It can’t, and it never will.” — musing on the likelihood of Wall Street controlling bitcoin.
“That’s why we don’t deal with any other currencies or coins — because we’re so focused on making bitcoin the native currency for the internet.” — when asked about payments provider Square’s ambitions for bitcoin.
Marking the beginning of a new era of Hollywood tech glamour
Somehow it is slightly disconcerting to see iconic and historic movie theaters repurposed or simply demolished. The former is preferred. However, this is not just any renovation, not just any commercial repurposing.
This is a bold and strategic statement that Apple is not just the future of computing but the future of entertainment, enabler of creativity and the beating heart of digital communication.
In renovating, really rescuing the location, Apple has, seemingly, taken the deeper meanings to heart and tried, with a budget befitting the world’s largest company, to do justice to the majestic, historic landmark, even as they transformed it into a temple to all things Apple.
The link to Hollywood’s glory days is not inappropriate or hard to grasp, and there’s a nod to the innovative and pioneering spirit of those early days of film, and an attempt to draw a lane directly to the potential for Apple’s products and services to enhance creativity, entertainment experiences, and, well, life.
There’s also statement lurking in the transition, potentially a permanent one, which sees in-person pleasures like viewing a film on the big screen in opulent surroundings begin to fade into the past and a move into sales and learning nodes for devices and methods we can use to build and inhabit the metaverse.
In the press release from today the sub-head reads: “Historic theater has premiered new technology since 1927” – in an, apparently, heartfelt attempt to build a link between the technology of today and the entertainment marvels showcased at the theater during a bygone era.
The connections to Hollywood are no longer metaphoric
With Apple in the middle of a long transition away from just devices and hardware and into a service and communications company, the importance and multi-layered meaning of this location is unavoidable.
Creativity and communication, and most of all a deep bond with the emerging “creator class” that Apple itself had a huge role in bringing into being, are at the heart of the message they are sending with this location, the lavish and loving renovation and in the press release itself.
Once literally an underdog, first to IBM and later to the “evil empire” of Microsoft’s Kock-offs, Apple is still, oddly, often underestimated and misunderstood, or at least not understood until changes permeate society.
Nothing says, nay screams, that we are approaching a golden age of Apple than the new Apple Tower Theatre complex. That golden age will occur when the world catches up with the potential of having a professional film production studio in your pocket and all the other technical innovations still to come.
The great singularity of the Apple ecosystem
There is a hugely important convergence coming in the galaxy of Apple products, software and services, that is not yet halfway implemented. The next couple of years are bound to see powerful, sometimes confusing, always remarkable advances in the company’s offerings and the way that we interact with them.
And now, with the Apple Tower Theatre in LA, there is also a mecca which can be the end destination for any pilgrimage of the faithful. Also, with Hollywood creative talents literally around the corner, what better location could there be as a reminder for the power brokers that AppleTV+ is here to stay and plans to engage at all levels and intends to seek options on any deal.
Today at Apple Creative Studios will reach out to budding creativity everywhere
Strongly associated with the theater’s launch is also a enlargement and
Today at Apple Creative Studios – the project is a global initiative for “underrepresented young creatives” and is an ongoing part of Today at Apple which is hosted at Apple Stores worldwide.
As per the Apple press release:
“In collaboration with the nonprofit Music Forward Foundation, as well as Inner-City Arts and the Social Justice Learning Institute, Creative Studios LA will provide access to technology, creative resources, and hands-on experience, along with a platform to elevate and amplify up-and-coming talents’ stories over nine weeks of free programming.”
Apple: The overhead dome, which originally depicted scenes full of clouds and cherubs, had been painted over in a previous restoration. It now brightens the space with an atmospheric sky.
“Today at Apple will also offer public in-store sessions at Tower Theatre and virtual sessions hosted by Creative Studios teaching artists and mentors, including photographer and filmmaker Bethany Mollenkof, rapper and producer D Smoke, singer-songwriter Syd, and cellist and singer Kelsey Lu. Noah Humes and his mentor, Maurice Harris, two artists who worked on the mural outside Tower Theatre inspired by the spirit of Creative Studios LA, will also teach a virtual session. Everyone is welcome to register at apple.com/creative-studios-la.”
“Originally home to the first theater in Los Angeles wired for film with sound, the historic Tower Theatre was designed in 1927 by renowned motion-picture theater architect S. Charles Lee. That legacy of technological innovation continues today as the perfect venue to discover Apple’s full line of iPhone, iPad, and Mac, each of which has transformed modern-day filmmaking, photography, and music composition.”
“Upon the closing of its doors in 1988, the space has lain empty and unused. With the same level of care found in previous restoration projects, Apple collaborated with leading preservationists, restoration artists, and the City of Los Angeles to thoughtfully preserve and restore the theater’s beauty and grandeur. Every surface was carefully refinished, and the building has undergone a full seismic upgrade.”
Apple Tower Theatre Opens Thursday at 10 a.m.
The store team will welcome its first customers Thursday, June 24, at 10 a.m. Apple Tower Theatre will be open from 10 a.m. to 8 p.m. from Monday to Saturday, and 11 a.m. to 7 p.m. on Sunday, with team members ready to provide support and service to all visitors. For those wishing to order new products online, customers can get shopping help from Apple Specialists, choose monthly financing options, trade in eligible devices, receive Support services, and elect for no-contact delivery or Apple Store pickup.
Above: Photo by Michael Krahn on Unsplash with elements added by Lynxotic
Coming after a frenzied run-up the hand wringing is no surprise
I many ways it seems as if Bitcoin and Cryptocurrencies appeared suddenly in 2021 out of the head of Zeus. Protean and fully formed, with billions and trillions in market caps, and all your sisters, brothers, cousins and even the Uber driver climbing aboard.
And the FOMO blog posts, where every hour an innocent reader is assaulted by a story, perhaps true, perhaps exaggerated and certainly foolhardy in retrospect, of an innocent putting their life savings into Dogecoin and suddenly having, theoretically, huge gains at their disposal.
Meanwhile, craggy faced, ancient stock market mavens would interject famous last words that now appear to be wise. However, all that notwithstanding, this week’s crash is nothing new or unexpected.
In reality, as can be seen from the graphic below, provided by Visual Capitalist, there have been so may crashes / corrections and doomsday prognostications since 2012 in Bitcoin that it seems like a miracle the there’s any thing such as Crypto at all.
There’s a reason it’s not dead and it’s in the DNA
The resiliency, far from a shock to those that have been around more than a fortnight, is kinda the point. When Satoshi Nakamoto built the system architecture of Bitcoin and since then inspired the over 8000 new crypto entities that have been developed, it was, just like the internet itself that was build to survive WWIII, supposed to be as indestructible as possible.
Like physical gold, which is considered have been adopted as a store of value partly due to its indestructibility and immutability (alchemy notwithstanding) the volatility and sometimes violent-seeming life story of Bitcoin is a necessary adjust to its role in finance, commerce and even individual monetary survival.
Not for the faint of heart, perhaps
While the mainstream and those forces opposed to the adoption or survival of Bitcoin and Crypto are out in force pointing to the “unsuitability” of Bitcoin and other cryptocurrencies for any “legitimate” use as a trade or savings vehicle, the progress so far, in spite of the obvious fact that volatility has always been baked in to the situation, is an obvious refutation of that viewpoint.
Will the current drop in dollar values relative to Bitcoin end it’s popularity and strip it of the respect it has thusfrar earned among many? In a word, no. In essence what is happening is, as many have foretold, what happens often and repeatedly, the excess attention and dollars that were pumped into crypto by you brother, sister, cousin and Uber driver are now getting blown out, since those were more speculation and psychosis than any kind of vote for viability or permanency.
And, why not? Where was to concern, shock and hesitation by the masses when the prices seemed to only rise for weeks and even months across so many products and coins it was impossible to keep count? Why was to feeding frenzy and the mania-like piling on not ignored as an anomaly?
The herd does as the herd will do. Diamond hands and Paper hands will ebb and flow as long as the rivers flow to the sea and humans herd like buffalo. And, in all likelihood, dollars and euros and yen will be long forgotten when the last bitcoin is transferred to the final wallet in the sky.
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Lynxotic does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
